Chapter 2: Employment

Building a labour market that provides sustainable and well-paid
jobs, whilst addressing long-standing barriers to employment and
economic opportunity, is vital for reducing inequality and
delivering inclusive growth.

Government has a central role to play in ensuring that people
have the skills, support and opportunities to realise their full
potential. In particular, the Scottish Government shares the
European Commission's continued concern over youth employment and
the long-term impacts that the recession has had on our young
people.

This chapter sets out the actions being undertaken in Scotland
to boost youth employment, improve young people's skills, support
labour market participation and promote fair work. These actions
cover the third
CSR to
the
UK to address skills
mismatches by increasing employers' engagement in the delivery of
apprenticeships and reduce the number of young people with low
basic skills. This chapter also covers actions that support Europe
2020's 'Youth On The Move' flagship initiative.

Europe 2020 headline target:

Seventy-five per cent of the
EU population aged 20-64
should be employed.

Europe 2020 highlights that the improvement against this target
should include greater involvement of women, older workers, and
better integration of migrants in the workforce.

Current Scottish Performance

Table 2 sets out Scotland's current
performance against the Europe 2020 employment target.

Scotland's 20-64 employment rates for both females and males
increased over the year to 2014.

Supporting Youth Employment

The Scottish Government recognises that the legacy of the global
economic downturn has been to exacerbate a number of labour market
challenges which existed prior to the recession - including youth
unemployment and underemployment. That is why we continue to take
direct action to tackle unemployment and ensure that people who are
out of work or under-employed - particularly young people - have
access to the right training, skills and education
opportunities.

Developing the Young Workforce - Scotland's Youth Employment
Strategy

The Scottish Government's approach to improving Scottish
education, training and employer engagement with young people is
set out in our 7-year programme,
Developing the Young Workforce - Scotland's Youth Employment
Strategy (
DYW).
[13]DYW is a
7-year programme which aims to ensure that young people have access
to a broader range of learning options, improve and extend careers
advice and work experience, and ensure that skills and training
provision is shaped and supported by employers.

The first
DYW
annual report
[14] was published in December 2015 and set out progress in year
one, showing positive progress with the introduction of a careers
service earlier in school, improved connections between businesses
and schools and colleges through employer-led
DYW
groups, and new opportunities for school pupils to undertake
learning - for example new Foundation Apprenticeships - while still
at school.

Actions to Support Youth Employment

The Scottish Government's vision is to have a world-class
vocational education system in Scotland. To support the ambitions
laid out in
Developing the Young Workforce, we have taken a
multi-faceted approach to supporting youth employment. This
includes:

A Modern Apprenticeship (
MA) programme
[15] designed to be responsive to employer needs. 25,247
MA starts were
delivered in 2014-15, and we have exceeded our target to deliver
over 25,000
MAs each year,
with more than 101,000 new opportunities delivered since 2011.
Employers are highly satisfied, with 96 per cent saying that
MA participants
are better able to do their jobs after they completed the
MA programme.
The Scottish Government has set a target of delivering 30,000
MA places each
year by 2020.

In addition to high levels of support for new apprentices,
through the Modern Apprenticeship programme the Scottish
Government has also maintained the
Adopt an Apprentice initiative to give apprentices
affected by redundancy the best chance of completing their
apprenticeship. Employers willing to take on a redundant
apprentice receive a payment of £2,000 with employers in
the oil and gas industry receiving £5,000. Through this
initiative we have been able to support more than 2,225
apprentices back into work up until Q3 2015-16.

Opportunities For All[16] is the Scottish Government's commitment to an offer of an
appropriate place in learning or training for all 16-19 year olds
who are not in education, employment or training. Showing
progress towards this commitment, figures to March 2015 show that
91.7 per cent of school leavers were in a sustained positive
destination (that is were participating in learning, training or
work nine months after leaving school) , up from 90.4 per
cent in 2014. Sustained positive destinations have continued to
rise year on year from 84 per cent in 2007-08.

Youth Employment Scotland Fund

The Youth Employment Scotland Fund (
YESF)
[17] has incentivised 10,000 additional and sustainable job
opportunities for young people aged 16-29 across Scotland. A total
of £25 million was available for
YESF from
the Scottish Government and European Social Fund. The programme,
administered by Local Authorities (
LAs), supported
businesses with a threshold of 400 employees, including social
enterprises and third sector employers, who were eligible to apply
to the
LA responsible for
delivering the
YESF in
their area. The programme was available for jobs starts from 1
April 2013 to 30 June 2015. An evaluation of the programme is
underway, with a final report expected in Spring 2016.

Scotland's Employer Recruitment Incentives have been refocused
so that they remain relevant in an improving labour market.
Scotland's Employer Recruitment Incentive ran from June 2015 to
March 2016 to contribute to the additional costs of employing those
young people who will continue to face barriers to employment. The
programme will run again in 2016-17 with a focus on tackling
structural issues in the youth labour market with a focus on
support groups such as disabled young people, care experienced,
ex-military and young people with criminal convictions.

Employability Fund

To support activity that will help to develop the skills needed
to secure a job or progress to more advanced forms of training,
Skills Development Scotland will provide 11,650 training places in
2016-17 through the Employability Fund,
[18] working with Local Employability Partners. Since its
introduction in 2013-14 the Employability fund has delivered over
40,000 training places, with 66 per cent of those participating
reporting a positive outcome in 2014-15.

Employment Powers

From 1 April 2017, powers over some contracted employment
services for disabled people and those at risk of long-term
unemployment will be devolved to Scotland.
[19]

The focus initially for the launch of our new service will be on
the most disadvantaged people in the labour market, including those
with a disability but we will continue to develop the service until
2020. To provide a good quality employment support service with
reduced financial resources, we are developing better alignment and
integration with existing services. This creates a real opportunity
to provide targeted support to help people enter sustainable, fair
employment.

Promoting Fair Work

As well as helping people to enter and remain in employment, a
central priority of the Scottish Government is to encourage the
private sector to adopt fair and inclusive workplace practices. A
central part of
Scotland's Economic Strategy is the Scottish Government's
Fair Work agenda, encompassing job security, fair reward and
opportunities for personal and workplace development. A key
initiative working as part of the Scottish Government's Fair Work
agenda is the Scottish Business Pledge, outlined in
Box 2.

Fair Work Convention

A Fair Work Convention was established following the
recommendations of the Working Together Review.
[22] The Convention has been tasked with providing independent
advice to the Scottish Government on matters relating to innovation
and productive workplaces, Fair Work and the Living Wage in
Scotland to support the Scottish Government's objective to reduce
inequality and promote diversity and equality. Following a period
of extensive stakeholder engagement, the Convention will develop,
promote and sustain a fair employment and workplace framework and
advise the Scottish Government on issues relating to Fair Work
which are within the scope of the current devolution
settlement.

Box 2: Scottish Business Pledge

The Scottish Business Pledge,
[20] launched in May 2015, is a shared mission between the Scottish
Government and businesses, with the goal of boosting productivity,
competitiveness, employment, fair work and workforce engagement and
development. By making their Pledge, companies demonstrate their
commitment to shared values and to deliver them through their
actions and future plans.

Up to February 2016, over 220 Scottish companies had signed up
to the Scottish Business Pledge. The Scottish Government's
Programme for Scotland 2015-16 sets out a commitment to continue
raising awareness of the Pledge and encouraging more businesses to
choose this route to productivity and business growth; fostering a
business-led Pledge network to provide opportunities for companies
to come together to learn from each other; and working with trade
and business bodies to explore sectoral challenges and how they
might be addressed.